Home Prices Have To Stop Rising

March 13, 2006|Don Barnett Pembroke Pines

I concur with the author of a recent letter that stated that housing prices will fall. All of your articles couch real-estate "bad" news with the counter-opinion of experts who use soft-ball terms (e.g., a slowdown, "we won't see double-digit increases," etc.).

It is misleading to tell anyone to buy now, even if they are a "user" vs. an investor. There is much evidence that house prices increased over 130 percent in five years (and most within the last three years). Real income wages did change by double digits in that time period.

The real-estate frenzy was propped up by low interest rates and creative financing techniques. Facing 7-plus percent loan rates, those days are over. You cannot look at the plethora of poor purchase decisions and not conclude that buyers who are overstretched by payments, insurance, taxes and homeowner associations will be in trouble for a couple of years. Many will dump their houses or face foreclosure.

People are now trying to sell homes at over $400,000. Home owners who bought three or five years ago have plenty of equity, they can agree to lower offers.

How can anyone (but a Realtor) say this market will continue to grow? I think house prices will fall off in the double digit range over the next two years. Instead of printing softball articles, why doesn't the South Florida Sun-Sentinel do an in-depth analysis?